Bernard Madoff biography
Bernard Madoff was born on April 29, 1938, in Queens, New York. He used $5,000 earned from a lifeguarding job to found his investment company. Madoff's firm offered reliable returns and his client list included celebrities like Steven Spielberg. Madoff's son reported him for securities fraud and Madoff pleaded guilty to 11 felony counts. In 2009, the 71-year-old was sentenced to 150 years in prison.
Bernard Lawrence Madoff was born on April 29, 1938, in Queens, New York, to parents Ralph and Sylvia Madoff. Ralph, the child of Polish immigrants, worked for many years as a plumber. His wife, Sylvia, was a housewife and the daughter of Romanian and Austrian immigrants. Ralph and Sylvia married in 1932, at the height of the Great Depression. After struggling financially for many years, in the early 1950s, they became involved in finance.
Records of his Madoff's financial dealings show they were less than successful with the trade. His mother registered as a broker-dealer in the 1960s, listing the Madoffs' home address in Queens as the office for a company called Gibraltar Securities. The SEC forced the closure of the business for failing to report their financial condition. The couple's house also had a more than $13,000 tax lien which went unpaid from 1956 until 1965. Many suggest that the company and the loans were all a front for Ralph's backhanded dealings.
But the young Madoff showed no interest in finance during this time; he was far more focused on girlfriend Ruth Alpern, who he met in junior high. The couple continued to date while they attended Far Rockaway High School in 1952. Madoff's other interest was the school swim team. When he wasn't competing in meets, his swim coach hired Bernie as a lifeguard at the Silver Point Beach Club in Atlantic Beach, Long Island. Madoff began saving the money he made on the job for a later investment.
After graduating from high school in 1956, Madoff headed to University of Alabama, where he stayed for one year before transferring to Hofstra University. In 1959, he married high school sweetheart Ruth, who was attending Queens College with a focus on finance.
The next year, Madoff earned his bachelor's degree in political science from Hofstra. Ruth also graduated, and landed a job on the stock market in Manhattan. Bernard began to study law at Brooklyn Law School, but quit later that year to began his own investment firm. Using the $5,000 he earned from his summer lifeguarding job and a side gig installing sprinkler systems, Madoff and his wife founded Bernard L. Madoff Investment Securities, LLC.
With the help of Madoff's father-in-law, a retired C.P.A., the business attracted investors through word-of-mouth and amassed an impressive client list including stars such as Steven Spielberg, Kevin Bacon and Kyra Sedgewick. Madoff Investment Securities grew famous for its reliable annual returns of 10 percent or more and, by the 1980s, his firm handled up to 5 percent of the trading on the New York Stock Exchange.
As Madoff's fame as a successful investor grew, Madoff Securities began using computer technology to develop stock quotes. The program that the firm tested and helped to develop became the National Association of Securities Dealers Automated Quotations, or NASDAQ. Madoff later served as president of the board of directors for the NASDAQ stock exchange.
As the business expanded, Madoff began employing more and more of his family members to help with the company. His brother Peter joined him in the business in 1970 as the firm's chief compliance officer. Later, Madoff's sons Andrew and Mark also worked for the company as traders. Peter's daughter, Shana, became a rules-compliance lawyer for the trading division of her uncle's firm, and his son, Roger, joined the firm before his death in 2006.
But Madoff became famous for a very different reason on December 10, 2008. After the investor informed his sons that he planned to give out several million dollars in bonuses two months earlier than scheduled, they demanded to know where the money was coming from. Madoff then admitted that a branch of his firm was actually an elaborate Ponzi scheme. Madoff's sons reported their father to federal authorities, and the next day Madoff was arrested and charged with securities fraud.
Madoff reportedly admitted to investigators that he had lost $50 billion of his investors' money, and pled guilty to 11 felony counts—securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the United States Securities and Exchange Commission (SEC), and theft from an employee benefit plan—on March 12, 2009. While the extent of his fraud is still being uncovered, prosecutors say $170 billion moved through the principal Madoff account over decades, and that before his arrest the firm's statements showed a total of $65 billion in accounts.
Madoff was imprisoned until a sentencing hearing scheduled for June 16th. He was sentenced to 150 years in prison on June 29, 2009—the maximum possible prison sentence for the 71-year-old defendant.